Airbus President and CEO Fabrice Bregier (left) and Alabama Gov. Robert Bentley celebrate Airbus' announcement that the company plans to build an A320 Family final assembly line in Mobile, Ala.

Airbus President and CEO Fabrice Bregier (left) and Alabama Gov. Robert Bentley celebrate Airbus' announcement that the company plans to build an A320 Family final assembly line in Mobile, Ala.

Photo: Airbus

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Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala., is shown in this artist's depiction.

Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala., is shown in this artist's depiction.

Photo: Airbus

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Here's the site of Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala.

Here's the site of Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala.

Photo: Airbus

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Here's the site of Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala.

Here's the site of Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala.

Photo: Airbus

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Here's the site of Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala.

Here's the site of Airbus' planned A320 final assembly line at the Brookley Aeroplex in Mobile, Ala.

Photo: Airbus

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U.S. Airbus plant could be trouble for Boeing

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One of the big reasons Boeing went all-out to win the U.S. Air Force's aerial refueling tanker contract was that it didn't want European competitor Airbus to open a aircraft plant in this country. Now, that's happening anyway.

Airbus parent EADS' tanker proposal included an Airbus A330 final assembly line in Mobile, Ala. That died when the Air Force chose Boeing's cheaper 767-based tanker.

On Monday, however, Airbus announced that it will build an A320 assembly line in Mobile.

So why does this affect Boeing?

One big reason is that Airbus currently builds airplanes in euros but sells them in dollars.

"Every 10 cents the dollar weakens to the euro costs Airbus $1 billion in profits," Seattle-area aviation analyst Scott Hamilton wrote on Saturday. "Although (final assembly) is only 5 percent of the airplane's value, it represents 15 percent of its costs, according to a Wall Street analyst. Airbus has been working for years to increase its dollar-based costs and this helps."

And The Wall Street Journal noted last week that labor costs tend to be lower in union-hostile states such as Alabama than in Europe, where Airbus now builds A320s, and the Puget Sound area, where Boeing builds 737s. It's one reason Boeing decided to put its second 787 Dreamliner assembly line in South Carolina.

Having a U.S. line also could help Airbus win friends in Congress, future Pentagon competitions and orders in the Americas, The Journal and Hamilton wrote.

The Journal spoke to that last point, noting: "Airbus forecasts North America as the single largest market for its A320 aircraft, which are workhorses for U.S. airlines such as United Continental Holdings Inc., JetBlue Airways Group Inc. and Delta Air Lines Inc. Last July, AMR Corp., parent company of American Airlines, broke an extended stretch of exclusively purchasing jets from Boeing to buy 260 Airbus jets."

But the big deal here is that the plant will add production capacity for in-demand single-aisle aircraft. Both Airbus and Boeing have huge backlogs for these airplanes, both current models and more-efficient re-engined versions set to come out later this decade.

"Airbus' decision to open a Mobile (final assembly line) gives the company the ability to initially open four slots a month from 2016 and the potential to boost this to eight a month," Hamilton wrote.

This gives Airbus a major opening to offer the (re-engined A320) to 737 and 757 operators who need fuel-savings airplanes long before Boeing can hope to offer them. Boeing already trails in market-share, 47 percent-53 percent. Airbus could, over time, add two or three percentage points, according to one Wall Street analyst. This shift could last decades — until either Airbus or Boeing design and introduce a New Small Airplane that has major technological advances.

Boeing reacted to Monday's announcement with the same statement it issued after news leaked last week, saying:

While it is interesting once again to see Airbus promising to move jobs from Europe to the United States, no matter how many are created, the numbers pale in comparison to the thousands of US jobs destroyed by illegal subsidies, which Airbus and its European government underwriters have failed to remove to the satisfaction of the US Government and in direct contravention of international trade law.

In separate cases, the World Trade Organization has ruled that Boeing and Airbus both received illegal subsidies, although the amounts to Airbus were larger.